An Energy Policy for Long-Term Economic Growth

October 25, 2012

Finding reliable sources of energy is imperative to maintain the current American lifestyle while growing the economy, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.

U.S. oil consumption is expected to increase by a third over the next 20 years and electricity demand will increase by more than 45 percent. Such observations call for bold initiatives to be taken if the United States wishes to avoid energy shortage and high prices.

The blueprint for an energy renaissance to take effect requires several steps.

  • First is basically for "government do no (further) harm." This means disassembling the framework set in place by the Environment Protection Agency (EPA). Two such rules highlighted, are the Utility MACT (maximum achievable control technology) Rule and the Cross-State Air Pollution Rule. The Utility MACT rule requires retrofitting 753 electricity-generating outlets. However, the standards are so rigid that even the most recently permitted plants, which are equipped with the best technologies, cannot meet the level. Credit Suisse estimates that this rule could cost $100 billion by 2017.
  • The second step is to give up on the current romance with green jobs. Research from King Juan Carlos University shows that for every green job the government creates, 2.2 jobs are lost.
  • The third step is the end of inefficient ethanol subsidies that are supported by current programs like the Renewable Fuel Standard. One report by the U.S. Agriculture Department determined that every dollar spent subsiding ethanol costs consumers more than $4.
  • The fourth is to end the moratorium on oil and gas production. The government must allow the extraction of oil and gas from public lands and offshore. Given that fossil fuel reserves are one the largest U.S. resource, it should be appropriately utilized.
  • The final key is investing in the necessary delivery infrastructure. Now is not the time to shy away from investing in large-scale delivery systems like the Keystone XL pipeline that could transport large quantities of fuel needed to feed a growing economy.

Ultimately, buffering against distortions from government interference in the market is a crucial necessity for an energy renaissance. A truly visionary plan for America would unleash the power of the markets and competition in all areas of energy production and delivery, allowing the Bill Gates and Steve Jobs of the energy arena to innovate America's way to a brighter future.

Source: H. Sterling Burnett, "An Energy Policy for Long-Term Economic Growth," Jewish Policy Center, Fall 2012.

 

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